Obligation GOLDMAN SACHS GLOBAL 0% ( XS2125042890 ) en GBP

GOLDMAN SACHS GLOBAL

100 % ▲

Etats-unis

XS2125042890 ( en GBP )

18/02/2021 - Obligation échue

Prospectus brochure de l'obligation Goldman Sachs International XS2125042890 en GBP 0%, échue

Goldman Sachs International est une filiale britannique de Goldman Sachs, offrant une gamme complète de services bancaires d'investissement, de gestion d'actifs et de négociation de titres à une clientèle mondiale.

L'obligation Goldman Sachs International (ISIN: XS2125042890), émise aux États-Unis en GBP, à un taux d'intérêt de 0%, échéant le 18/02/2021 et payant des intérêts annuellement, a atteint sa maturité et a été intégralement remboursée à 100% de sa valeur nominale.

GOLDMAN SACHS INTERNATIONAL BANK
incorporated with unlimited liability in England
CERTIFICATE OF DEPOSIT PROGRAMME
in respect of STEP compliant "A" Certificates of Deposit and non-STEP compliant "B"
Certificates of Deposit
For an unlimited amount
Goldman Sachs International Bank, a bank incorporated in England with unlimited liability (the
"Issuer"), subject to compliance with all relevant laws, regulations and directives, may from time to
time issue certificates of deposit with a maturity of not more than 364 days from and including the date
of issue to but excluding the maturity date or, in the case of extendible CDs, the Final Maturity Date (as
defined herein) (the "A CDs") and certificates of deposit with a maturity that exceeds 364 days from
and including the date of issue to but excluding the maturity date or, in the case of extendible CDs, the
Final Maturity Date (the "B CDs" and, together with the A CDs, the "CDs") under the programme (the
"Programme") as described in this base prospectus (the "Base Prospectus").
Application has been made to the Commission de Surveillance du Secteur Financier (the "CSSF") in its
capacity as competent authority under the Luxembourg Act dated 10 July 2005 on prospectuses for
securities (loi relative aux prospectus pour valeurs mobilières) (the "Prospectus Act 2005") to approve
this document as a base prospectus in respect of the B CDs. By approving this Base Prospectus, the
CSSF shall give no undertaking as to the economic and financial soundness of the operation or the
quality or solvency of the Issuer in accordance with Article 7(7) of the Prospectus Act 2005.
Application has been made to the Luxembourg Stock Exchange to approve this document as a
simplified prospectus in respect of the A CDs. Application has also been made to the Luxembourg
Stock Exchange for the A CDs and the B CDs issued under the Programme to be listed on the official
list of the Luxembourg Stock Exchange and admitted to trading on the regulated market of the
Luxembourg Stock Exchange, which is a regulated market for the purposes of Directive 2014/65/EU
("MiFID II"). The Issuer may also issue unlisted A CDs and unlisted B CDs and/or A CDs and B CDs
not admitted to trading on any market. Any Extendible A CDs (as defined herein) will be unlisted.
This document constitutes a base prospectus (the "Base Prospectus") in respect of the B CDs for the
purposes of Article 5.4 of Directive 2003/71/EC (as amended or superseded) (the "Prospectus
Directive") and should be read together with any supplements thereto, all documents incorporated by
reference herein and any final terms ("Final Terms"). This document also constitutes (i) a simplified
base prospectus in respect of the A CDs for the purposes of Chapter 2 Part III of the Prospectus Act
2005; and (ii) an information memorandum for the purposes of the Short-Term European Paper
("STEP") Initiative.
In accordance with the STEP Initiative, this Programme will be submitted to the STEP Secretariat in
order to apply for the STEP label in respect of the A CDs. The STEP label will not apply to the B CDs.
The status of STEP compliance of this Programme can be determined from the STEP Market website
(www.stepmarket.org). This website is not sponsored by the Issuer and the Issuer is not responsible for
its content or availability. The CSSF expresses no opinion on the STEP label. Certain prescribed
information required by the STEP label is included in the Appendix hereto.
The distribution of this Base Prospectus and any Final Terms and the offering or sale and delivery of
the CDs in certain jurisdictions may be restricted by law. Persons into whose possession this Base
Prospectus or any Final Terms come are required by the Issuer to inform themselves about, and to
observe, any such restrictions. Subject to certain exceptions, the CDs may not be offered, sold or
delivered, directly or indirectly, in the United States of America or to US persons. The CDs have not
been and will not be registered under the United States Securities Act of 1933, as amended (the
"Securities Act"), or under the securities or blue sky laws of any state. Neither the US Securities and
Exchange Commission nor any other regulatory body has approved or disapproved of the CDs or
passed upon the accuracy or inaccuracy of this Base Prospectus. This Base Prospectus is not for use in,
and may not be delivered to or inside, the United States.
The Issuer has been assigned a long-term debt credit rating of A+ and a short-term debt credit rating of
A-1 by Standard & Poor's Ratings Services ("S&P"); a long-term debt credit rating of A and a short-

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term debt credit rating of F1 by Fitch, Inc. ("Fitch"); and a long-term debt credit rating of A1 and a
short-term debt credit rating of P-1 by Moody's Investors Service Inc. ("Moody's").
The credit ratings of the Issuer referred to in this Base Prospectus have been issued by Fitch, Moody's
and S&P, of which only Fitch is registered under Regulation (EU) No. 1060/2009, as amended (the
"CRA Regulation"). In general, European regulated investors are restricted from using a rating for
regulatory purposes if such rating is not either (1) issued or validly endorsed by a credit rating agency
established in the European Union and registered with the European Securities and Markets Authority
("ESMA") under the CRA Regulation or (2) issued by a credit rating agency established outside the
European Union which is certified under the CRA Regulation. The EU affiliates of Moody's and S&P
are registered under the CRA Regulation. The ESMA has approved the endorsement by such EU
affiliates of credit ratings issued by Moody's and S&P. Accordingly, credit ratings issued by Moody's
and S&P may be used for regulatory purposes in the EU. A security rating is not a recommendation to
buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by
the assigning rating agency.
An investment in CDs under the Programme involves certain risks. See "Risk Factors" for a
discussion of certain factors to be considered in connection with any investment in the CDs.
Dealers
Goldman Sachs International
Goldman Sachs Bank Europe SE
Base Prospectus dated 4 March 2019

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IMPORTANT NOTICE
The Issuer accepts responsibility for the information contained in this Base Prospectus. To the best of
the knowledge of the Issuer (who has taken all reasonable care to ensure that such is the case) the
information contained in this Base Prospectus is in accordance with the facts and does not omit
anything likely to affect the import of such information. Where information contained in this Base
Prospectus has been sourced from a third party, such information has been accurately reproduced and
so far as issuer is aware and is able to ascertain from information published by that third party, no facts
have been omitted which would render the reproduced information inaccurate or misleading.
In relation to CDs listed on the official list of the Luxembourg Stock Exchange, this Base Prospectus is
valid for a period of twelve months after its date of approval. The Issuer has undertaken, in connection
with the listing of the CDs, that if there shall occur any material adverse change in the financial
condition or operations of the Issuer or any modification or amendment to the terms and conditions of
the CDs such that this Base Prospectus would be inaccurate or misleading, the Issuer will prepare and
make available a supplement to this Base Prospectus or a further Base Prospectus for any subsequent
issue of CDs to be listed on the official list of the Luxembourg Stock Exchange.
The expression "necessary information" means, in relation to any of the CDs, the information necessary
to enable investors in such notes to make an informed assessment of the assets and liabilities, financial
position, profits and losses and prospects of the Issuer and of the rights attaching to the CDs. In relation
to the different types of CDs that may be issued under the programme, the Issuer has included in this
Base Prospectus all of the necessary information except for information which is not known at the date
of this Base Prospectus and which can only be determined at the time of an individual issue of the CDs.
Any information relating to the CDs which is not included in this Base Prospectus and which is
required in order to complete the necessary information in relation to an issue of the CDs will be
contained either in the relevant Final Terms or in a further Base Prospectus. For issues of CDs which
are the subject of Final Terms, those Final Terms will, for the purposes of that issue only, complete this
Base Prospectus and must be read in conjunction with this Base Prospectus.
This Base Prospectus or any Final Terms do not constitute an offer to sell, or a solicitation of an offer
to buy, any CDs offered hereby by any person in any jurisdiction in which it is unlawful for such
person to make such an offer or solicitation. Neither the delivery of this Base Prospectus nor the
delivery of any Final Terms nor any sale made hereunder shall under any circumstances imply that
there has been no adverse change in the financial situation of the issuer since the date hereof or, as the
case may be, the date upon which this base prospectus has been most recently supplemented.
The Issuer has appointed Goldman Sachs International and Goldman Sachs Bank Europe SE as dealers
in respect of the CDs pursuant to a dealer agreement dated 4 March 2019 (together with further dealers
appointed under the Programme from time to time, the "Dealers") under the Programme and authorised
and requested the Dealers to circulate this Base Prospectus in connection with the Programme on its
behalf to purchasers or potential purchasers of the CDs. Every offering of CDs will be designed,
distributed and monitored in accordance with all applicable legal and regulatory requirements
(including any product governance requirements).
Benchmarks Regulation

Amounts payable under the CDs may be calculated or otherwise determined by reference to certain
reference rates. Any such reference rate may constitute a benchmark for the purposes of the
Benchmarks Regulation (Regulation (EU) 2016/1011) (the "Benchmarks Regulation"). If any such
reference rate does constitute such a benchmark, the applicable Final Terms will indicate whether or
not the benchmark is provided by an administrator included in the register of administrators and
benchmarks established and maintained by the European Securities and Markets Authority ("ESMA")
pursuant to article 36 of the Benchmarks Regulation. Not every reference rate will fall within the scope
of the Benchmarks Regulation. Furthermore, transitional provisions in the Benchmarks Regulation may
have the result that the administrator of a particular benchmark is not required to appear in the register
of administrators and benchmarks at the date of the applicable Final Terms. The registration status of
any administrator under the Benchmarks Regulation is a matter of public record and, save where
required by applicable law, the Issuer does not intend to update the applicable Final Terms to reflect
any change in the registration status of the administrator.

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Presentation of Information
In this Base Prospectus, unless otherwise specified or the context otherwise requires, references to "US
dollars", "USD" and "US$" are to the lawful currency of the United States; references to "Sterling"
and "£" are to the lawful currency of the United Kingdom; and references to "euro" and "" are to the
single currency introduced at the start of the third stage of European Economic and Monetary Union
pursuant to the treaty establishing the European Community, as amended from time to time. Certain
monetary amounts included in this base prospectus have been subject to rounding adjustments.
Accordingly, figures shown as totals in certain tables may not be an exact arithmetic aggregation of the
figures that precede them.

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TABLE OF CONTENTS
Page
IMPORTANT NOTICE ............................................................................................................................ 3
RISK FACTORS ....................................................................................................................................... 6
OVERVIEW OF THE PROGRAMME .................................................................................................. 17
DOCUMENTS INCORPORATED BY REFERENCE .......................................................................... 20
TERMS AND CONDITIONS OF THE A CDS ..................................................................................... 21
TERMS AND CONDITIONS OF THE B CDS ...................................................................................... 34
FORM OF FINAL TERMS A CDS ..................................................................................................... 46
FORM OF FINAL TERMS B CDs ...................................................................................................... 50
USE OF PROCEEDS .............................................................................................................................. 54
INFORMATION CONCERNING THE ISSUER ................................................................................... 55
TAXATION ............................................................................................................................................ 61
FORM OF THE GLOBAL A CDS ......................................................................................................... 64
FORM OF THE GLOBAL B CDS ......................................................................................................... 70
SUBSCRIPTION AND SALE ................................................................................................................ 76
GENERAL INFORMATION.................................................................................................................. 78
APPENDIX INFORMATION REQUIRED FOR THE PURPOSES OF THE STEP LABEL............ 80

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RISK FACTORS
This Base Prospectus does not describe all of the risks of an investment in the CDs. The Issuer
disclaims any responsibility to advise investors of such risks as they change from time to time. Further,
the Issuer makes no representations as to (i) the suitability of any CDs for any particular investor, (ii)
the appropriate accounting treatment or possible tax consequences of an investment in any CDs or (iii)
the expected performance of any CDs, either in absolute terms or relative to competing investments.
Prospective CD holders should obtain their own independent accounting, tax and legal advice and
should consult their own professional investment adviser to ascertain the suitability of the CDs as an
investment and should conduct such independent investigation and analysis regarding the risks and
cash-flows associated with the CDs as they deem appropriate to evaluate the merits and risks of an
investment in the CDs. In particular, prospective CD holders should note that an investment in the CDs
is only suitable for persons who (i) have the knowledge and experience in financial and business
matters necessary to enable them to evaluate the information contained in the Base Prospectus and
Final Terms and the risks of the CDs in the context of their own financial, tax and regulatory
circumstances and investment objectives; (ii) are able to bear the economic risk of an investment in the
CDs for an indefinite period of time; and (iii) are acquiring the CDs for their own account for
investment, not with a view to resale.
Risks relating to the Issuer
The Issuer's businesses have been and may continue to be adversely affected by conditions in the
global financial markets and economic conditions generally.
The Issuer's businesses, by their nature, do not produce predictable earnings and are materially affected
by conditions in the global financial markets and economic conditions generally, both directly and
through their impact on client activity levels. These conditions can change suddenly and negatively.
Regulatory uncertainty
As a participant in the financial services industry and a subsidiary of a systemically important financial
institution, the Issuer is subject to extensive regulation principally in the United Kingdom and the
European Union ("EU") more generally, but also in the US as a subsidiary of The Goldman Sachs
Group, Inc. ("Group, Inc." and, together with its consolidated subsidiaries, the "GS Group") and in
certain other jurisdictions. The Issuer faces the risk of significant intervention by law enforcement,
regulatory and tax authorities, as well as private litigation, in all jurisdictions in which it conducts its
businesses. In many cases, the Issuer's activities may be subject to overlapping and divergent regulation
in different jurisdictions. Among other things, as a result of law enforcement authorities, regulators or
private parties challenging the Issuer's compliance with laws and regulations, the Issuer or its
employees could be fined or criminally sanctioned, prohibited from engaging in certain business
activities, subject to limitations or conditions on its business activities including higher capital
requirements, or subjected to new or substantially higher taxes or other governmental charges in
connection with the conduct of its businesses or with respect to its employees. Such limitations or
conditions may limit business activities and negatively impact the Issuer's profitability.
If there are new laws or regulations or changes in the enforcement of existing laws or regulations
applicable to the Issuer's businesses or those of the Issuer's clients, including capital, liquidity,
leverage, long-term debt, loss absorbing capacity and margin requirements, restrictions on other
business practices, reporting requirements, requirements relating to the implementation of the EU Bank
Recovery and Resolution Directive ("BRRD"), tax burdens and compensation restrictions, that are
imposed on a limited subset of financial institutions (either based on size, activities, geography or other
criteria) which may include the Issuer or Group, Inc., compliance with these new laws and regulations,
or changes in the enforcement of existing laws or regulations, could adversely affect the Issuer's ability
to compete effectively with other institutions that are not affected in the same way. In addition,
regulation imposed on financial institutions or market participants generally, such as taxes on financial
transactions, could adversely impact levels of market activity more broadly, and thus impact the
Issuer's businesses.
These developments could impact the Issuer's profitability in the affected jurisdictions, or even make it
uneconomic to continue to conduct all or certain businesses in such jurisdictions, or could result in the
Issuer incurring significant costs associated with changing business practices, restructuring businesses,

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moving all or certain businesses and employees to other locations or complying with applicable capital
requirements, including liquidating assets or raising capital in a manner that adversely increases the
Issuer's funding costs or otherwise adversely affects its shareholder and creditors.
The EU and national financial legislators and regulators have proposed or adopted numerous market
reforms that have impacted and may continue to impact the Issuer's businesses. These include stricter
capital and liquidity requirements (including proposed amendments to the Capital Requirements
Directive ("CRD IV") and the EU Capital Requirements Regulation ("CRR")), authorisations for
regulators to impose position limits, the Markets in Financial Instruments Regulation and the Markets
in Financial Instruments Directive (collectively and as amended, "MiFID II"), restrictions on short
selling and credit default swaps and market abuse regulations.
The implementation of higher capital requirements, the liquidity coverage ratio, the net stable funding
ratio, requirements relating to long-term debt and total loss-absorbing capacity ("TLAC") and the
prohibition on proprietary trading by the provisions of the U.S. Dodd-Frank Wall Street Reform and
Consumer Protection Act (Dodd-Frank Act) referred to as the "Volcker Rule" may continue to
adversely affect the Issuer's profitability and competitive position, particularly if these requirements do
not apply, or do not apply equally, to the Issuer's competitors or are not implemented uniformly across
jurisdictions.
The Issuer is also subject to laws and regulations relating to the privacy of the information of clients,
employees or others, and any failure to comply with these laws and regulations could expose the Issuer
to liability and/or reputational damage. As new privacy-related laws and regulations, such as the
General Data Protection Regulation ("GDPR"), are implemented, the time and resources needed for the
Issuer to comply with such laws and regulations, as well as the Issuer's potential liability for non-
compliance and reporting obligation in the case of data breaches, may significantly increase.
In addition, the Issuer's businesses are increasingly subject to laws and regulations relating to
surveillance, encryption and data on-shoring in the jurisdictions in which the Issuer operates.
Compliance with these laws and regulations may require the Issuer to change its policies, procedures
and technology for information security, which could, among other things, make the Issuer more
vulnerable to cyber attacks and misappropriation, corruption or loss of information or technology.
The Issuer has recently entered into a new consumer-oriented deposit-taking business. Entering into
such a new business, as with any new business, subjects the Issuer to numerous additional regulations
in the jurisdictions in which this business operates. Not only are these regulations extensive, but they
involve types of regulations and supervision, as well as regulatory compliance risks that the Issuer has
not previously encountered. The level of regulatory scrutiny and the scope of regulations affecting
financial interactions with consumers is often much greater than that associated with doing business
with institutions and high-net-worth individuals. Complying with such new regulations is time-
consuming, costly and presents new and increased risks.
Increasingly, regulators and courts have sought to hold financial institutions liable for the misconduct
of their clients where such regulators and courts have determined that the financial institution should
have detected that the client was engaged in wrongdoing, even though the financial institution had no
direct knowledge of the activities engaged in by its client. Regulators and courts have also increasingly
found liability as a "control person" for activities of entities in which financial institutions or funds
controlled by financial institutions have an investment, but which they do not actively manage. In
addition, regulators and courts continue to seek to establish "fiduciary" obligations to counterparties to
which no such duty had been assumed to exist. To the extent that such efforts are successful, the cost
of, and liabilities associated with, engaging in brokerage, clearing, market-making, prime brokerage,
investing and other similar activities could increase significantly. To the extent that the Issuer has
fiduciary obligations in connection with acting as a financial adviser, investment adviser or in other
roles for individual, institutional, sovereign or investment fund clients, any breach, or even an alleged
breach, of such obligations could have materially negative legal, regulatory and reputational
consequences.
The Issuer's liquidity, profitability and businesses may be adversely affected by Brexit.
In March 2017, the UK notified the European Council of its decision to leave the EU ("Brexit"). There
is considerable uncertainty as to the regulatory framework that will govern transactions and business

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undertaken by the bank in the EU, both in the near term and the long term. As a result, the Issuer faces
numerous risks that could adversely affect the conduct of its businesses, its profitability and liquidity.
The Issuer is incorporated and headquartered in the UK, and currently benefits from non-
discriminatory access to EU clients and infrastructure based on EU treaties and EU legislation,
including arrangements for cross-border "passporting" and the establishment of EU branches. Because
the agreement endorsed by EU and UK leaders in November 2018 ("Withdrawal Agreement") has not
been ratified by the UK and European parliaments, it is uncertain whether the Issuer will continue to
benefit from the existing access arrangements for financial services following 29 March 2019, the date
on which the UK is scheduled to leave the EU. Further, even if the Withdrawal Agreement is ratified,
there is uncertainty regarding the terms of the long-term trading relationship between the EU and the
UK, including the terms of access to each other's financial markets. As a result, there is a possibility
that the UK will leave the EU on 29 March 2019 without any transitional arrangements in place and
firms based in the UK, including the Issuer, will lose their existing access arrangements to the EU
markets.
In addition, Brexit has created an uncertain political and economic environment in the UK, and may
create such environments in other EU member states. Political and economic uncertainty has in the past
led to, and the outcome of Brexit could lead to, declines in market liquidity and activity levels, volatile
market conditions, a contraction of available credit, changes in interest rates or exchange rates, weaker
economic growth and reduced business confidence all of which could adversely impact the Issuer's
business.
The Issuer's market-making activities have been and may be affected by changes in the levels of
market volatility.
Certain market-making activities depend on market volatility to provide trading and arbitrage
opportunities to clients and decreases in volatility may reduce these opportunities and adversely affect
the results of these activities. In contrast, increased volatility, whilst it can increase trading volumes
and spreads, also increases risk as measured by Value-at-Risk ("VaR") and may expose the Issuer to
increased risks in connection with market-making activities or cause the Issuer to reduce its market-
making inventory to avoid increasing VaR. Limiting the size of such market-making positions can
adversely affect the Issuer's profitability. In periods when volatility is increasing, but asset values are
declining significantly, it may not be possible to sell assets at all or it may only be possible to do so at
steep discounts. In such circumstances, the Issuer may be forced to either take on additional risk or to
realise losses in order to decrease its VaR. In addition, increases in volatility increase the level of the
Issuer's risk-weighted assets ("RWAs"), which increases the Issuer's capital requirements.
The Issuer has exposure to market interest rate movements as a result of its lending and deposit-taking
activities. In addition to the impact on the general economy, changes in interest rates could directly
impact the Issuer in one or more of the following ways:
(a)
the yield on interest-earning assets, primarily on lending activities, and rates paid on
interest-bearing liabilities, primarily deposit-taking activities, may change in
disproportionate ways;
(b)
the value of certain balance sheet and off-balance sheet financial instruments could
decline; or
(c)
the cost of funding from affiliates or third parties may increase and the ability to raise
funding could become more difficult.
The Issuer's profitability depends to an extent on net interest income. Accordingly, the Issuer's results
depend on movements in market interest rates and its ability to manage interest-rate sensitive assets and
liabilities in response to these movements. Factors such as inflation, recession and instability in
financial markets, among other factors beyond the Issuer's control, may affect interest rates. Any
substantial, unexpected, prolonged change in market interest rates could have an adverse effect on the
Issuer's balance sheet, liquidity and profits. Changes in the level of interest rates also may negatively
affect the Issuer's ability to originate loans, the value of assets and the Issuer's ability to realise gains
from the sale of assets, all of which ultimately affect earnings.

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The Issuer's liquidity, profitability and businesses may be adversely affected by an inability to access
the debt capital markets or to sell assets or by a reduction in its credit ratings.
Liquidity is essential to the Issuer's businesses. The Issuer's liquidity could be impaired by an inability
to access secured and/or unsecured debt markets, an inability to access funds from Group, Inc. or other
affiliates, an inability to sell assets or redeem investments or unforeseen outflows of cash or collateral.
This situation may arise due to circumstances that the Issuer may be unable to control, such as a
general market disruption or an operational problem that affects third parties or the Issuer or its
affiliates or even by the perception amongst market participants that the Issuer, or other market
participants, are experiencing greater liquidity risk.
The Issuer primarily relies on deposits to be a low cost and stable source of funding for the loans it
makes. The Issuer accepts deposits from institutional and private wealth management clients, issues
certificates of deposits and accepts deposits from its affiliates. If the Issuer experiences significant
withdrawals, for any reason, or raises the rates paid on deposits, funding costs may increase and the
Issuer may be required to rely on more expensive sources of funding. If the Issuer is required to fund
its operations at a higher cost, these conditions may require the Issuer to curtail its activities, which also
could reduce the Issuer's profitability.
Concentration of risk increases the potential for significant losses in the Issuer's activities.
Concentration of risk increases the potential for significant losses in market-making, underwriting, and
investing activities. The number and size of such transactions may affect the Issuer's results of
operations in a given period. Moreover, because of concentration of risk, the Issuer may suffer losses
even when economic and market conditions are generally favourable for competitors. Disruptions in
the credit markets can make it difficult to hedge these credit exposures effectively or economically.
The Issuer's businesses, profitability and liquidity may be adversely affected by deterioration in the
credit quality of, or defaults by, third parties who owe money, securities or other assets.
The Issuer is exposed to the risk that third parties who owe money, securities or other assets will not
perform their obligations. These parties may default on their obligations to the Issuer due to
bankruptcy, lack of liquidity, operational failure or other reasons. A failure of a significant market
participant, or even concerns about a default by such an institution, could lead to significant liquidity
problems, losses or defaults by other institutions, which in turn could adversely affect the Issuer.
The Issuer is also subject to the risk that its rights against third parties may not be enforceable in all
circumstances. In addition, deterioration in the credit quality of third parties whose securities or
obligations are held by the Issuer, including a deterioration in the value of collateral posted by third
parties to secure their obligations to the Issuer under derivatives contracts and loan agreements, could
result in losses and/or adversely affect the Issuer's ability to rehypothecate or otherwise use those
securities or obligations for liquidity purposes.
A significant downgrade in the credit ratings of the Issuer's counterparties could also have a negative
impact on the Issuer's results. While in many cases the Issuer is permitted to require additional
collateral from counterparties that experience financial difficulty, disputes may arise as to the amount
of collateral the Issuer is entitled to receive and the value of pledged assets. The termination of
contracts and the foreclosure on collateral may subject the Issuer to claims for the improper exercise of
its rights. Default rates, downgrades and disputes with counterparties as to the valuation of collateral
increase significantly in times of market stress and illiquidity.
The Issuer might underestimate the credit losses inherent in its loan portfolio and have credit losses in
excess of the amount reserved. While management uses the best information available to determine this
estimate, there could be future adjustments to the allowance for impairment of bank loans held at
amortised cost based on, among other things, changes in the economic environment or variances
between actual results and the original assumptions used.
Derivative transactions and delayed settlements may expose the Issuer to unexpected risk and
potential losses.
The Issuer is party to a number of derivative transactions, including credit derivatives. Many of these
derivative instruments are individually negotiated and non-standardised, which can make exiting,

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transferring or settling positions difficult. Many credit derivatives require that the Issuer deliver to the
counterparty the underlying security, loan or other obligation in order to receive payment. In a number
of cases, the Issuer does not hold the underlying security, loan or other obligation and may not be able
to obtain the underlying security, loan or other obligation. This could cause the Issuer to forfeit the
payments due under these contracts or result in settlement delays with the attendant credit and
operational risk as well as increased costs to the Issuer.
Derivative contracts and other transactions entered into with third parties are not always confirmed by
the counterparties or settled on a timely basis. While the transaction remains unconfirmed or during
any delay in settlement, the Issuer is subject to heightened credit and operational risk and in the event
of a default may find it more difficult to enforce its rights.
In addition, as new complex derivative products are created, covering a wider array of underlying
credit and other instruments, disputes about the terms of the underlying contracts could arise, which
could impair the Issuer's ability to effectively manage its risk exposures from these products and
subject it to increased costs. The provisions of legislation requiring central clearing of credit derivatives
and other over-the-counter (OTC) derivatives, or a market shift toward standardised derivatives, could
reduce the risk associated with such transactions, but under certain circumstances could also limit the
Issuer's ability to develop derivatives that best suit the needs of clients and to hedge its own risks, and
could adversely affect the Issuer's profitability and increase credit exposure to such a platform.
A failure in the Issuer's operational systems or infrastructure, or those of third parties, could impair
liquidity, disrupt its businesses, result in the disclosure of confidential information, damage its
reputation and cause losses.
The Issuer's businesses are highly dependent on its ability to process and monitor, on a daily basis, a
very large number of transactions, many of which are highly complex, and occur at high volumes and
frequencies, across numerous and diverse markets in many currencies. These transactions, as well as
information technology services provided to clients, often must adhere to client-specific guidelines, as
well as legal and regulatory standards.
Many rules and regulations worldwide govern the Issuer's obligations to report transactions and other
information to regulators, exchanges and investors. Compliance with these legal and reporting
requirements can be challenging, and the Issuer has been, and may in the future be, subject to
regulatory fines and penalties for failing to report timely, accurate and complete information. As
reporting requirements expand, compliance with these rules and regulations has become more
challenging.
The use of computing devices and phones is critical to the work done by the Issuer's employees and the
operation of the Issuer's systems and businesses and those of its clients and third-party service
providers and vendors. It has been reported that there are some fundamental security flaws in computer
chips found in many types of computing devices and phones. Addressing this issue could be costly and
affect the performance of these businesses and systems, and operational risks may be incurred in
applying fixes and there may still be residual security risks.
Additionally, although the prevalence and scope of applications of distributed ledger technology and
similar technologies is growing, the technology is also nascent and may be vulnerable to cyber attacks
or have other inherent weaknesses. The Issuer may be, or may become, exposed to risks related to
distributed ledger technology through the Issuer's facilitation of clients' activities involving financial
products linked to distributed ledger technology, such as blockchain or cryptocurrencies and the use of
distributed ledger technology by third-party vendors, clients, counterparties, clearing houses and other
financial intermediaries.
In addition, the Issuer faces the risk of operational failure, termination or capacity constraints of any of
the clearing agents, exchanges, clearing houses or other financial intermediaries that it uses to facilitate
securities and derivatives transactions, and as interconnectivity with clients grows, the Issuer will
increasingly face the risk of operational failure with respect to clients' systems.
Despite the resiliency plans and facilities that are in place, the Issuer's ability to conduct business may
be adversely impacted by a disruption in the infrastructure that supports its businesses and the
communities in which the Issuer is located. This may include a disruption involving electrical, satellite,

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